I do not own this stock of Sylogist Ltd (TSX-SYZ, OTC-SYZLF). I learned about this stock from the newsletter I subscribe to. The financial year ends at September 30 each year.
When I was updating my spreadsheet, I noticed that they did not do that well in 2019. Sales did not meet analyst’s expectations and were down slightly from 2018. EPS is down for 2019 as is the stock price. The stock price fell 21% in 2019 and is down another 10% so far this year. Note the financial year for this company is September 30 each year.
Also, in 2019 there was a lot of insider selling with Net Insider Selling at 10% of outstanding shares. The CEO was a heavy seller, selling 33% of his holdings. There was also a lot of stock options granted in 2019 at 7% of the outstanding shares. If course, people could be selling for a lot of reasons that have nothing to do with the company.
Dividends were started 9 years ago in 2010. Dividend yields have been moderate (2% range to 4% range) to good (5% or over). The current dividend yield is moderate at 4.43%. The 5, 9 and historical median dividend yields are also moderate at 3.01%, 3.02% and 3.02%. The dividend increases have varied a lot. The biggest increase was between in 2011 at 84%. The lowest one was in 2017 at 5.7%. In 2019 dividends were increased by 25%. There have been no increases since September 2019. Also, the company has paid special dividends in different years.
The Dividend Payout Ratios are current fine if not a bit high. The DPR for EPS for 2019 was 88% with 5 year coverage at 87%. The DPR for EPS has been over 100% a number of times. The DPR for CFPS for 2019 was 50% with 5 year coverage at 58%. I get a DPR for Free Cash Flow for 2019 at 49% with 5 year coverage at 56%.
Debt Ratios are very good. There is no Long Term Debt/Market Cap Ratio as the company has no current long term debt. The Liquidity Ratio is 3.26 for 2019 and so very good. The Debt Ratio for 2019 at 3.97 is also very good. The Leverage and Debt/Equity Ratios for 2019 at also very good at 1.24 and 0.24 respectively.
The Total Return per year is shown below for years of 5 to 21 to the end of 2019. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | 13.43% | 3.98% | 0.37% | 3.61% |
| 2009 | 10 | 22.06% | 31.33% | 23.96% | 7.37% |
| 2004 | 15 | 22.77% | 19.16% | 3.61% | |
| 1999 | 20 | 7.38% | 5.88% | 1.50% | |
| 1998 | 21 | 1.82% | 0.68% | 1.15% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 23.94, 29.26 and 34.13. The corresponding 10 year ratios are 19.48, 26.46 and 33.77. The corresponding historical ratios are 4.47, 10.31 and 17.31. The historical ones are low because of negative earnings and therefore negative P/E Ratios. The current P/E Ratio is 20.27 based on 2020 EPS estimate of $0.45 and a stock price of $9.02. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $4.97. The 10 year low, median, and high median Price/Graham Price Ratios are 1.77, 2.50 and 3.01. The current P/GP Ratio is 1.81 based on a stock price of $9.02. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 4.15. The current P/B Ratio is 3.65 based on a Book Value of $48.5M, Book Value per Share of $2.47 and a stock price of $9.02. The current ratio is 12% below the 10 year median P/B Ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 3.02%. The current dividend yield is 4.43% based on dividends of $0.40 and a stock price of $9.02. The current dividend yield is 47% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap. Since the 9 year median is the same as the historical median, there would be no difference in the test outcome.
The 10 year median Price/Sales (Revenue) Ratio is 6.45. The current P/S Ratio is 5.50 based on 2020 Revenue estimate of $38.9M, Revenue per Share of $1.64 and a stock price of $9.02. The current ratio is 15% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably relatively reasonable and below the median. The only test to say differently is the dividend yield test which says the stock is cheap. There is actually no reason to ignore this test. So, it is possible that the stock price is relatively cheap.
Is it a good company at a reasonable price? I find it an interesting company. It has certainly given back to the shareholders good dividends since dividends were started. It has a mixed record of return with those investing in 1998 earning little at a total return of $1.82%. The 5 year return is also low at 3.98%. However, 5 years ago the P/E Ratio was 69.07, a rather high ratio. The price is reasonable.
When I look at analysts’ recommendations, I find Buy (1) and Hold (1). The consensus would be a Buy. The 12 month stock price is $14.80. This implies a total return of 68.51.% with 64.08% from capital gains and 4.43% from dividends based on a current stock price of $9.02.
See what analysts are saying on Stock Chase. Currently a couple of analysts think it is a weak buy. Mat Litalien on Motley Fool says it has had a disappointing year, but it is a good tech buy for income. A writer on Simply Wall Street says because the company is paying out more than half its earnings and this could lower future dividend growth if earnings slow down. A writer on Simply Wall Street is surprised that this small company has 41% institutional ownership. The company put out fourth quarterly results on Newswire.
Sylogist Ltd is a software company that provides Enterprise Resource Planning solutions, including fund accounting, grant management and payroll to public service organizations. The company operates in one business segment that is Public Sector. Geographically, the company offers its services to the United States of America and United Kingdom region. Its web site is here Sylogist Ltd .
The last stock I wrote about was about was Transcontinental Inc (TSX-TC.A, OTC-TCLAF) ... learn more. The next stock I will write about will be Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF) ... learn more on Monday, January 27, 2020 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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